APSE Energy - Members briefing 19/15 (November 2015)

APSE Energy is pleased to announce that Hartlepool Borough Council has joined APSE Energy bringing the number of councils in membership to 55. APSE Energy continues to grow across local government and we are delighted to welcome Hartlepool into membership. An updated membership list is available here.

2. Outcome of the Spending Review and the Autumn Statement

The Chancellors Autumn Statement on 25 November setting out the outcome of the Comprehensive Spending Review (CSR) provided no relief for local authorities and community bodies who are pushing forward on their local energy plans. Much of the detail is yet to emerge, but the key highlights are described briefly below:DECC cutsDECC's budget will be reduced by 22% over the next four years, delivered through efficiencies in corporate services and reducing the cost of contracts. The Department's innovation programme will, however, be doubled to £500m over the next five years, which will strengthen the future security of supply, reduce the costs of decarbonisation and boost industrial and research capabilities. The official Autumn Statement document reads: "DECC will deliver £220m of resource savings by 2019-20 through efficiencies from pooling back office and corporate services, and reducing the costs of contracts to manage the country’s historic coal and nuclear liabilities."Renewable Heat Incentive (RHI)In its Spending Review and Autumn Statement the Government has confirmed that the RHI will be continued. The Chancellor stated that the RHI will be cut by £700m. However, in the Spending Review document, the following was stated: "The government will increase funding for the Renewable Heat Incentive to £1.15 billion by 2020-21, while reforming the scheme to deliver better value for money. By the end of the Parliament the government expects to have incentivised enough additional renewable heat to warm the equivalent of over 500,000 homes".

There is no further detail at this moment. How the RHI is to be reformed is yet to be seen, and there are no details on the specific technologies. We have meetings lined up with DECC in the coming days and weeks, as lobbying now moves away from HM Treasury back to DECC.

Community Energy – Enterprise Investment Scheme (EIS) and Social Investment Tax Relief (SITR)Community Energy England and its counterparts in Wales and Scotland have begun legal action against HM Treasury over the decision to make community energy projects exempt from tax relief schemes. The highly controversial decision to remove community energy’s eligibility for EIS, SEIS and SITR schemes was announced last month and is set to come into force on 30 November. However, Community Energy England has now questioned the legality of the move given a promise made by chancellor George Osborne during March 2015’s budget statement, during which he said a six-month notice period would be given on changes to tax relief allowing for a transition to the SITR system.The Treasury has claimed that the removal of tax relief incentives has been made in order to stamp out abuse of the schemes but has yet to provide any detailed response to questioning, nor an impact assessment made prior to the decision. The challenge comes in the form of a ‘letter before action’ which forms the first part of pre-action protocol for a judicial review, which would pour public scrutiny over the decision.Carbon Capture and Storage (CCS)The Department of Energy & Climate Change has axed a £1bn fund to commercialise carbon capture & storage (CCS) in the UK. The announcement was made by posting a regulatory announcement to the London stock exchange. The statement read: “Today, following the Chancellor's Autumn Statement, HM Government confirms that the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available. This decision means that the CCS Competition cannot proceed on its current basis. We will engage closely with the bidders on the implications of this decision for them.” The £1bn fund was intended to be allocated via a competition to support the development and deployment of CCS projects in the UK.Renewable Obligation and Feed-in-TariffDECC has yet to make an announcement on the outcome of the consultations on the future of the Renewable Obligation (RO) and the Feed-in-Tariff (FiT). The last date which the Government could announce changes to come into effect on 1 January 2016 through parliamentary approval was 22 November which means that it is now impossible for the Government to meet their own deadline. Draft Statutory Instruments are subject to a 40 day period in which they are laid before the House of Commons before coming into effect. This means that it is highly improbable that the changes will come into effect before February and it may be as late as March. It is anticipated that a further announcement will be made before Parliament goes into the Christmas recess.

It should also be remembered that Ofgem has set out a further degression in the FiT rates which take effect on 1 January 2016. The tariff rates for the Feed-in Tariff scheme are from 1 January 2016 to 31 March 2016, for photovoltaic installations. They can be accessed at Feed-in Tariff (FIT) Payment Rate Table

3. Local Authority Energy Index 2015

The parliamentary launch of the Local Authority Energy Index 2015 took place at the House of Commons on 19 November. The Local Authority Energy Efficiency Index is a tool allowing officials, councillors and other interested parties to measure their energy efficiency efforts against other areas, and find ways to overcome barriers they may be facing. The index is sponsored by Knauf Insulation with support from the Green Investment Bank and GE lighting. It was researched by Steven Fawkes and Michael Floyd of EnergyPro Ltd. EnergyPro is an advisory company specialising in energy efficiency, energy management and the financing of energy efficiency and clean technology.This second, enlarged report, researched during 2015 and published on 19th November 2015, scores 103 Local Authorities in England (it does not include Wales or Scotland) on a number of indicators, including energy efficiency in the community and housing, as well as energy management within their own buildings and the energy infrastructure that they oversee. The report is available to download on-line at http://laenergyindex.co.uk/APSE Energy members performed extremely well in the energy index with 3 of our local authorities in the top 5 councils (Peterborough City Council 2nd, Southampton City Council 3rd and Stockton-On-Tees Council 5th). A number of other APSE Energy members councils were highly ranked in the top 50 including (Sefton Metropolitan Borough Council, Oxford City Council, Nottingham City Council and Doncaster Metropolitan Borough Council).Well done to all those councils which demonstrates again that local authorities are leading the way in tackling energy efficiency in their own estate and acting as community leaders.

4. Energy Storage in the U.K. an overview by the Renewable Energy Association (REA)

Energy storage is a potential game changer for clean energy. Informed opinion from Sir David King the U.K’s Climate Change Envoy and Lord Nicholas Stern have highlighted the potential benefits of energy storage for the future of clean distributed energy systems. But energy storage is now moving from the realms of possibility into commercial reality. Our strategic partners the Renewable Energy Association (REA) have produced an excellent and informative guide to energy storage in the U.K. which is available as a free download.The first edition of the REA’s Energy Storage in the UK report, published winter 2015, is now available to the public. The report introduces readers to the key technologies in this rapidly emerging area, offers an overview of the current market in the UK including listing existing projects, outlines international policies that support the development of the energy storage market, and identifies barriers and next steps for the domestic development of this industry. You can download a copy of the report at ‘REA’s Energy Storage in the UK report’

5. APSE Energy Policy Briefing 13/15 – The Merton Rule

Attached with this members’ briefing is a policy briefing prepared by APSE Energy and the Renewable Energy Association (REA) on the use of the ‘Merton Rule’ by local authorities. The Merton rule is the name given to requirements at a local authority level for energy efficiency and energy generation in all new build developments and some retrofit properties and was enacted in the 2008 Planning and Energy Act. APSE Energy and the REA will be undertaking further work on the application of the Merton Rule by local authorities and we will keep you updated as this progresses.